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99-8742r 102 RESOLUTION NO. 8742 RESOLUTION AUTHORIZING THE ADOPTION OF THE MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE RICHFIELD REDEVELOPMENT PROJECT AREA; AND ESTABLISHING THE INTERCHANGE WEST AND L YNDALE GATEWAY TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING THE TAX INCREMENT FINANCING PLAN RELATED THERETO. BE IT RESOLVED by the City Council (the "Council") of the City of Richfield, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The Richfield Housing and Redevelopment Authority (the "HRA") has heretofore established the Richfield Redevelopment Project Area (the "Redevelopment Project") and adopted the Redevelopment Plan with respect thereto and it has been proposed that the HRA establish within the Richfield Redevelopment Project Area the Interchange West and Lyndale Gateway Tax Increment Financing District and approve the Tax Increment Financing Plan related thereto (the "TIF Plan") and the modification to the existing Redevelopment Plan related thereto (the "Modification"); all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 through 469.047 and 469.174 through 469.179, all inclusive, as amended, (the "Act") all as reflected in the Modification and TIF Plan, and presented for the Council's consideration. 1.02. The Council has investigated the facts relating to the Modification and TIF Plan and has caused the Modification and TIF Plan to be prepared. 1.03. The City has performed all actions required by law to be performed prior to the establishment of the Interchange West and Lyndale Gateway Tax Increment Financing District and the adoption and approval of the proposed Modification and TIF Plan, including, but not limited to, notification of Hennepin County and School District No. 280 having taxing jurisdiction over the property to be included in the Interchange West and Lyndale Gateway Tax Increment Financing District; notice of a potential redevelopment district to the local county commissioner; a review of and written comment on the Modification and TIF Plan by the City Planning Commission; and the holding of a public hearing upon published notice as required bylaw. Section 2. Findings for the Adoption and Approval of the Modification and TIF Plan. 2.01. The Council hereby finds that the Modification and TIF Plan, are intended and, in the judgment of this Council, the effect of such actions will be, to provide an impetus for redevelopment in the public purpose and accomplish certain objectives as specified in the Modification and TIF Plan, which are hereby incorporated herein. Resolution No. 8742 -2- Section 3. Findinas for the Establishment of the Interchange West and Lvndale Gateway Tax Increment Financina District. 3.01. The Council hereby finds that the Interchange West and Lyndale Gateway Tax Increment Financing District is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, subd. 10 (a)(1). 3.02. The Council further finds that the proposed redevelopment, in the opinion of the Council, would not occur solely through private investment within the reasonably foreseeable future; that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the Interchange West and Lyndale Gateway Tax Increment Financing District permitted by the Tax Increment Financing Plan; that the Modification and TIF Plan conform to the general plan for the development or redevelopment of the City as a whole; and that the Modification and TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole, for the development or redevelopmentof the Interchange Wesf and LyndaleGateway Tax Increment Financing District by private enterprise. 3.03. The City elects to make a qualifying local contribution in accordance with Minnesota Statutes, Section 273.1399, subd. 6(d), in order to qualify the Interchange West and Lyndale Gateway Tax Increment Financing District for exemption from state aid losses set forth in Section 273.1399. 3.04. The Council further finds, declares and determines that the City made the above findings stated in this Section and has set forth the reasons and supporting facts for each determination in writing, attached hereto as Exhibit A. 3.05. The City of Richfield elects to calculate fiscal disparities for the Interchange West and Lyndale Gateway Tax Increment Financing District in accordance with Minnesota Statutes, Section 469.177, subdivision 3, clause b, which means the fiscal disparities contribution would be taken from within the Interchange West and Lyndale Gateway Tax Increment Financing District. Section 4. Public Purpose The adoption of the Modification and TIF Plan conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the City which is already built up, to provide employment opportunities, to improve the tax base and to improve the general economy of the State and thereby serve a public purpose. Resolution No. 8742 -3- Section 5. Approval and Adoption of the Modification and TIF Plan. :-:t~P':1q{,f,\:i,(:_~'h}L'F' 5.01. The Modification and TIF Plan, as presented to the Council on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the Community Development Department. 5.02. The staff of the City, the City's advisors and legal counsel are authorized and directed to proceed with the implementation of the Modification and TIF Plan and to negotiate, draft, prepare and present to this Council for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. 5.03 The Auditor of Hennepin County is requested to certify the original net tax capacity of the Interchange West and Lyndale Gateway Tax Increment Financing District, as described in the Modification and TIF Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased; and the City of Richfield is authorized and directed to forthwith transmit this request to the County Auditor in such form and content. as the Auditor may specify, together with a list of all properties within the Interchange West and Lyndale Gateway Tax Increment Financing District, for which building permits have been issued during the 18 months immediately preceding the adoption of this resolution. 5.04. The City is further authorized and directed to file a copy of the Modification and TIF Plan with the Commissioner of Revenue. Adopted by the City Council of the City of Richfield, Minnesota this 14th day of June, 1999. /?;~u Martin J. Kirs, ayor ATTEST: ~/JM Thomas P. Ferber, City Clerk - ATTACHMENT A TO RESOLUTION RESOLUTION NO. 8742 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the Interchange West portion of the Interchange West and Lyndale Gateway Tax Increment Financing District, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that the Interc~ange. ~est. portion of the Interch.anfle West ~nd Lyndale Gate~ay Tax Increment Financmg Dlstnct IS a redevelopment dlstnct as defmed m M.S., SectIOn 469.174, Subd. 10(a)(1). Interchange West portion consists of 98 parcels, with plans to redevelop the area for housing and commercial purposes. At least 70 percent of the area in the parcels in the Interchange West portion of the Tax Increment Financing District is occupied by buildings, streets utilities, or other improvements and more than 50 percent of the buildings in the Interchange West portion of the Tax Increment Financing District, not including outbuildings, is structurally substandard to a degree requiring substantial renovation or clearance (See Appendix F of the TIF Plan). 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to . result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the Interchange West and Lyndale Gateway Tax Increment Financing District permitted by the Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in this plan meets the City's objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently occupied by substandardpuildings, the limited amount of commercial/industrial property for expansion adjacent to the existing project, the incompatible land uses at close proximity, and the cost offinancihg the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance (see attachment in Appendix F of the TIF Plan). . The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimat~d to resu{t from the proposed d~velopment .after subtracting the present value of the projected tax mcrements for the maximum duration of the TIF District permitted by the plan: The City supp.~~ed this finding on the grounds that the cost of site and public !mprovements and utlll!les a~d to the total redevelopment cost. Historically, site and public Improvements costs In thiS area have made redevelopment infeasible without tax increment assistance. Thereforee,. the . City reasonably determines that no other redevelopment of any kind is. anticipated on this site without substantially similar assistance being provided to the development. Resolution No. 8742 Attachment A Accordingly, the increased market value anticipated without tax increment assistance is $0. A comparative analysis '.r;qtht:}~timatedmarket values both with and without establishment of the InterchangeWVVest and Lyndale Gateway Tax Increment Financing District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in the Interchange West project of the Interchange West and Lyndale Gateway Tax Increment Financing District, the total increase in market value would be up to $129,303,942. The present value of tax increments from the Interchange West and Lyndale Gateway Tax Increment Financing District is estimated to be $28,175,217. It is the Council's finding that no development with a market value of greater than $101,128,725 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition, site improvements, public improvements and redevelopment in the general area of the Interchange West and Lyndale Gateway Tax Increment Financing District (see Cashflow in Appendix D of the TIF Plan). 3. Finding that the Tax,ln9rement Financing Plan for the Interchange West project of the Interchange West and Lyndale Gateway Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan was reVieWed by the Planning Commission on May 25, 1999. The Planning Commission found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for the Interchange West project of the Interchange, West and Lyndale Gateway Tax Increment Financing pistrict will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Richfield Redevelopment Project Area by private enterprise. The project to be assisted by the Interchange West project in the Interchange West and Lyndale Gateway Tax Increment Financing District will result in increased employment and housing opportunities in the City and the State of Minnesota, the replacement of substandard properties, increased tax base of the State and add a high quality development to the City. ATTACHMENT B TO RESOLUTION RESOLUTION NO. 8742 The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the Lyndale Gateway portion of the Interchange West and Lyndale Gateway Tax Increment Financing District, as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1. Finding that the Lyndale Gateway project in the Interchange West and Lyndale Gateway Tax Increment Financing District is a redevelopment district as defined in M.S., Section 469.174, Subd. 10(a)(1). The Lyndale Gateway portion of the Interchange West and Lyndale Gateway Tax Increment Financing District consists of 37 parcels, with plans to redevelop the area for housing and commercial purposes. At least 70 percent of the area in the parcels in the Lyndale Gateway project is occupied by buildings, streets, utilities, or other improvements and more than 50 percent of the buildings in the Lyndale Gateway project, not including outbuildings, is structurally substandard to a d~gree requiring substantial renovation or clearance (See Appendix F of the TIF Plan). 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the Interchange West and Lyndale Gateway Tax Increment Financing District permitted by the Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in this plan meets the City's objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount of commercial/industrial property for expansion adjacent to the existing project, the incompatible land uses at close proximity, and the cost of financing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance (see attachment in Appendix F of the TIF Plan). The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the T1F District permitted by the Plan: The City supported this finding on the grounds that the cost of site and public improvements and utilities add to the total redevelopment cost. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance. This site has been marketed for at least 14 years without success. Resolution No. 8742 Attachment B Therefore, the City reasonably determines that no other redevelopment of any kind is anticipated on this site withouN;;substantially similar assistance being provided to the development. Accordingly, the increased market value anticipated without tax increment assistance is $0. A comparative analysis of estimated market values both with and without establishment of the Interchange West and Lyndale Gateway Tax Increment Financing District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in the Lyndale Gateway project in the Interchange West and Lyndale Gateway Tax Increment Financing District, the total increase in market value would be up to $24,646,406. The present value of tax increments from the Lyndale Gateway project in the Interchange West and Lyndale Gateway Tax Increment Financing District is estimated to be $4,339,493. It is the C()uncil's finding that no development with a market value of greater than $20,306,913 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition, site improvements, public improvements and redevelopment in the general area of the Interchange West and Lyndale Gateway Tax Increment Financing District (see Cashflow in Appendix D of the TIF Plan). 3. Finding that the Tax Increment Financing Plan for the Lyndale Gateway project of the Interchange West and Lyndale Gateway Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan was reviewed by the Planning Commission on May 25, 1999. The Planning Commission found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for the Lyndale Gateway project of the Interchange West and Lyndale Gateway Tax Increment Financing District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Richfield Redevelopment Project Area by private enterprise. The project to be assisted by the Interchange West and Lyndale Gateway Tax Increment Financing District will result in increased employment and housing opportunities in the City and the State of Minnesota, the replacement of substandard properties, increased tax base of the State and add a high quality development to the City.